How to Use Tax Extenders for 2016

Each year Congress decides whether or not to extend some of the more common tax deductions and special provisions for individuals and businesses. Many people believe it’s rather foolish and a waste of time to “kick the can down the road” as opposed to making these provisions permanent. There is a movement afoot to go ahead and make many of the most popular tax breaks permanent. In the meantime, here is a list of those provisions affecting the most taxpayers that have been extended into 2016.
  • The exclusion from gross income of imputed income from the discharge of  acquisition indebtedness for a principal residence
  • The  tax deduction for mortgage insurance premiums
  • The tax deduction for state and local sales taxes in lieu of state and local income taxes
  • The deduction from gross income for qualified tuition and related expenses
  • The deduction from gross income of tax-free distributions from individual retirement accounts for charitable purposes
  • The tax deduction for the expenses of elementary and secondary school teachers and  the expansion of such deductions to include expenses in connection with  the professional development activities of an educator
  • The work opportunity tax credit, which allows a credit to employers for the hiring of a qualified long-term unemployment recipient (unemployed for not less than 27 consecutive weeks)
  • Accelerated depreciation of qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements
  • The additional 50% depreciation allowance (bonus depreciation) for business assets and the election to accelerate the alternative minimum tax credit in lieu of bonus depreciation
  • The increased expensing allowance for business assets, computer software, and qualified real property (i.e., leasehold improvements, restaurant property, and retail improvement property)
  • The tax deduction for energy efficient commercial buildings
  • The tax credit for the production of electricity from wind, biomass, geothermal energy, landfill gas, trash, qualified hydropower, and marine and hydrokinetic renewable energy facilities
  • The 100% exclusion from gross income of gain from the sale of small business stock
  • Requires mortgage interest information returns to include:
  1. the amount of the outstanding mortgage at the beginning of the calendar year
  2. the address of the property securing such mortgage, and
  3. the date of the origination of the mortgage.

How to Use Tax Extenders for 2016
For clients in the San Francisco North Bay Sonoma, Napa and Marin Counties